What is an offer for sale (OFS)? SEBI rules (2026)
To answer what is an offer for sale: an OFS is a sale of a listed company's existing shares by its promoters or other shareholders through a separate window on the stock exchange. The rules in force are paragraph 19 of Chapter 1 of SEBI's Master Circular for Stock Exchanges and Clearing Corporations dated 30 December 2024, which carries the January 2023 OFS framework (read 21 October 2026). SEBI's circular listing shows no newer OFS circular than June 2024. Because the shares already exist, the company raises no money. The proceeds go to the seller.
Definition
An offer for sale (OFS)
is a sale of existing shares of a listed company by its promoters or other shareholders through a separate bidding window on BSE, NSE or MSEI, under SEBI's OFS framework. It transfers ownership without raising new capital, and reserves at least 10% for retail investors and 25% for mutual funds and insurers. Source: SEBI.
What is an offer for sale, and who can sell through one?
Paragraph 19.1.2.2 of the Master Circular names two groups of sellers:
- Promoters and promoter group entities of companies that must raise public shareholding to the minimum under Rules 19(2)(b) and 19A of the Securities Contracts (Regulation) Rules, 1957, read with LODR Regulation 38. The minimum public shareholding post explains that rule.
- Any promoter, promoter group entity or non-promoter shareholder of a company with an average daily market capitalisation of 1,000 crore rupees or more over the six months before the month the OFS opens.
The paragraph read on 21 October 2026 sets no minimum stake for a non-promoter seller. Any investor registered with a broker of those exchanges may buy, except the promoters. When a non-promoter is the seller, the promoters may buy, subject to the ICDR, SAST and LODR Regulation 38 rules.
How does an OFS run, day by day?
| Day | What happens (Master Circular para) |
|---|---|
| T-1, by 5 pm | The seller notifies the exchange of the sale: seller and company names, exchanges, dates, the allocation method, the number of shares, any green shoe, the seller's brokers and any withdrawal conditions. The floor price is disclosed by the same deadline. An exchange may extend it to 6 pm (19.1.5.2, 19.1.5.3) |
| T day | Only non-retail investors bid. The cut-off price is set from that day's bids (19.1.5.5.2) |
| T+1 day | Retail investors and employees bid. Non-retail bidders who chose to carry their bids forward can take up any unsubscribed retail portion (19.1.5.5.3, 19.1.7.8) |
The OFS runs during normal trading hours, and normal trading in the stock continues alongside it. The seller deposits all the shares on offer with the clearing corporation before the window opens (19.1.6.4).
How are OFS shares reserved and allocated?
Paragraph 19.1.7 sets the allocation rules:
- At least 25% of the shares offered is reserved for mutual funds and insurance companies. Any unsubscribed part goes to other bidders.
- At least 10% of the offer size is reserved for retail investors, meaning individuals who bid a total of no more than 2 lakh rupees across exchanges.
- No single bidder other than mutual funds and insurers may be allocated more than 25% of the offer.
The seller may offer retail investors a discount, disclosed in the notice, and the discounted price may fall below the floor price (19.1.5.4). Promoters may also sell to employees within two weeks of the OFS, with each employee eligible for up to 2 lakh rupees of shares and a maximum bid of 5 lakh rupees (19.1.2.2.4, 19.1.5.6.4).
25 crore rupees
Minimum size of an OFS; promoters may offer less if that achieves minimum public shareholding in a single tranche
Source: SEBI Master Circular for Stock Exchanges and Clearing Corporations dated 30 December 2024, Chapter 1, para 19.1.3, read 21 October 2026
What are the OFS cooling-off rules?
The seller may not buy or sell the company's shares for a period before and after the offer. The length depends on how liquid the shares are (19.1.2.4.1): 2 weeks for most liquid shares, 4 weeks for liquid shares and 12 weeks for illiquid ones. Liquidity is measured by mean impact cost on a trade of 1 lakh rupees. Promoters of liquid or illiquid stocks may sell only through an OFS or a QIP, with two weeks between offers. Separately, SEBI insider trading window restrictions do not apply to OFS transactions carried out under this framework (19.1.5.6.14).
Where does an OFS show up in ownership data?
The seller's notice goes to the exchanges on T-1 day, and the exchanges publish it. The change in ownership then shows up in the next quarterly shareholding pattern, which LODR Regulation 31(1)(b) requires within 21 days of quarter end. A promoter sale lowers the promoter and promoter group total and raises the public line. Flock's filing week page lists the insider trades, bulk deals and stake disclosures filed in the last seven days by the investors Flock tracks, each with its filing date.
So what is an offer for sale in short: an exchange-run sale of existing shares with a T-1 notice, a floor price, set reservations and a cooling-off period. The OFS vs buyback page sets it beside a buyback, which moves shares the other way.
Flock reads primary filings and disclosures, dates each one, and links back to the source. What the data means for you is your call to make.
Frequently asked questions
What is an offer for sale (OFS)?
An offer for sale is a sale of a listed company's existing shares by its promoters or other shareholders through a separate window on BSE, NSE or MSEI. The company raises no money; the seller gets the proceeds. Source: SEBI Master Circular for Stock Exchanges and Clearing Corporations dated 30 December 2024, Chapter 1, para 19, read 21 October 2026.
Who can sell shares through an OFS?
Promoters and promoter group entities that must raise public shareholding to the minimum level can use it. For companies with an average daily market capitalisation of 1,000 crore rupees or more over the six months before the month the OFS opens, any promoter, promoter group entity or non-promoter shareholder can sell. Source: SEBI Master Circular dated 30 December 2024, para 19.1.2.2, read 21 October 2026.
Are shares reserved for retail investors in an OFS?
Yes. At least 10% of the offer size is reserved for retail investors, meaning individuals bidding a total of no more than 2 lakh rupees across exchanges, and at least 25% of the shares offered is reserved for mutual funds and insurance companies. Retail bids are placed on T+1 day. Source: SEBI Master Circular dated 30 December 2024, para 19.1.7, read 21 October 2026.
How is an OFS different from a QIP?
An OFS sells existing shares on the exchange to any eligible investor, so the company raises nothing. A QIP is a private placement to qualified institutional buyers under ICDR Chapter VI that issues eligible securities, although promoters can also sell through a QIP to meet minimum public shareholding. Source: SEBI Master Circular dated 30 December 2024; SEBI ICDR Regulations 2(1)(tt) and 173.
Flock tracks these filings, sourced, dated, and linked back to the original. See what smart-money entities disclosed, without the guesswork about what it means.
Disclosures shown are public regulatory filings. Data may be delayed or incomplete. Smart-money entities may no longer hold positions shown. Not investment advice.